Sunday, June 23, 2013

2013 AAUP Presentation, Print in a Digital World

Slide Notes:

title I’d like to talk today about leveraging print in a digital world and while yes, we’re not talking about ebooks—we’re talking about real physical books—we can’t really leave the electronic realm because while these are paper books, they’re digitally printed and distributed.

While the difference between offset and digital printing is getting harder to detect in the physical product, the way it changes manufacturing is worth taking a look at, and specifically, worth exploiting.

So just what are these differences and how might we exploit them, well let’s have a look:

Digital/Inkjet Printing

First, there are no plates, which means I don’t have to guess how much I need, I don’t have to print how much I guessed, and I don’t have to further guess if it’s going to be really big in Japan. Books can instead be printed as needed, and almost more  importantly, they can be printed where they are needed. So rather than shipping to the customer, they’re printed closer to the customer, typically in the same UPS zone.

When I talk to people about how we use POD people often get confused about the various players and the particular type of platform we’re talking about so as a quick review, I’d like to go over some basics.

Kinds of POD
How they Print
  • SRDP (really just humble digital printing)
  • One-offs (True POD, both with toner and inkjet)

How they Distribute
  • Direct Channel Partners (Lightning Source)
  • Drop shipping
  • Print in warehouse
  • Distributed Printing (or Freelance/Contract Printing)
At this point, this might be the best way to think about these two players.

Direct Channel Partners (Lightning Source)
Distributed Printing (Amazon/CreateSpace)

5 Lightning Source Direct Channel Partners: US (partial list)
•Baker & Taylor
•Barnes and Noble
•Your Customers, Contributors, Reviewers

6 Lightning Source Direct Channel Partners: UK (partial list)
•Your Customers, Contributors, Reviewers

7 Lightning Source Direct Channel Partners: Australia (partial list)
•James Bennett
•University Co-op
•Your Customers, Contributors, Reviewers

8 LS prints typically in their own warehouses, here in Pennsylvania, La Vergne, of course, they have a new facility in California, then over the pond to Milton Keynes, and now with Global Connect, they have partners in Brazil and Australia. It’s useful to note that those last two LS foot prints aren’t their own (distributed printing), but instead use established players in those territories, and then forging new partnerships like their Direct Channel partners in the English speaking territories.

Amazon, on the other hand, probably doesn’t have a lot of print capacity in most,  or maybe in any of their warehouses, (maybe in the spate of new ones?) instead the original BookSurge Model relied on large scale regional printers and negotiating long and short term partnerships created when and where capacity is needed. This doesn’t always work as is occasionally evident when parts of a season are particularly busy, like textbook season, or the holidays. This last couple of years, however, seem to indicate that they have worked many of those problems out.

You could think of Amazon as fairly large Web properties across the globe, who have super-secret printing and distribution capacity everywhere—and they know where we live, and have almost everyone’s credit card information. So, a really great ROI is possible for their CreateSpace partners, vs. say, their Advantage partners.

9 So after thinking about how these platforms worked, and the territories they covered, we decided to try something unusual, particularly to address the issue of libraries choosing paperbacks over hardcovers when simultaneously released. We started releasing hardcovers only in the US market, but putting both the paperback and hardcover in Lightning Source for the UK, and Australia, and in POD as a paperback in CreateSpace for Amazon's UK, German, and Japanese sites. While Lightning Source offers both hardcover and paperback editions from its platform, CreateSpace only offers paperbacks. So in essence, when a non-illustrated book is released, it is only available as a hardcover in the US, but it's available in both formats for a good portion of the rest of the world.

10 Any book that isn't an art book has been handled this way since 2010.

11 Using this strategy were were able to increase international sales by 22.5% in units, and 23.55% in net dollars.

It’s worth noting that this analysis not only evaluates our POD strategy, it also evaluates another unusual strategy we tried. Since our art books couldn’t be included in the POD program, we also moved those to a separate international distributor in 2009.

The drop between 2011 and 2012 is probably more likely related to a hopefully temporary 20% drop in new titles for that year.

12 Now, this isn't really a fair comparison because it doesn't actually take into account some factors that might actually show the benefits are actually greater than just the net revenue we're receiving from our partners. They don't include some of the benefits we see when selling a POD edition outside of the United States, like avoiding a wholesaler or distributor cut when selling a CreateSpace edition, avoiding the so-called "Amazon Advantage" program and instead selling the CreateSpace edition at a true short discount, and avoiding a lot of shipping charges. Also, net dollars in the case of Amazon is net after the printing charge. If we were to include the printing costs of the pre-2010 editions the increase would be significantly higher.

13 We also realized that since these titles were already in POD, we could offer another option for adoptions in the US beyond just the hardcover edition available in that market. We rolled out a program called the Early Adopter Program and what we do with this program is offer a low cost POD paperback edition, in the US dropped shipped from LS US, to the campus bookstore. They are sold non-returnable, and without a barcode.

To market the Early Adopter program we did two things:

First, we started notifying our authors about the program in the email sent to all new authors upon publication, which contains marketing tools for their book, and gives them a brief introduction to our marketing services. But some authors are already aware of the program having heard about it from their acquiring editor.

We also created a postcard which we distribute at conferences, especially to faculty members complaining about the price of hardcovers, and expressing a desire for a paperback for classroom use. This program has been very popular with authors and other faculty, and has been a useful acquisitions tool.

14 The production process for the Early Adopter editions involves removal of the barcode from the paperback file, and uploading that new cover file to LS. We then take the order from the bookstore and drop ship desired quantity to the store.

15 There are some problems associated with this approach, the first of which is Market Leakage,  and that refers to books from the UK crossing the ocean, so pricing must discourage this. This usually manifests itself in the form of an EU/UK bookseller listing it on Amazon's US site through Marketplace. Amazon will not remove 3rd party territorial violations from the Marketplace section of their site but the most frequent violator of this restriction is Book Depository and they will remove it when asked.

Your territorial distributor must be willing to go non-exclusive, or at the very least, allow sales through POD

CreateSpace, née BookSurge, has created a kludgee interface with publishers. Currently territories are indicated through marking a Y or N on a spreadsheet. But even that doesn’t always work. They have no idea why. *Surprised Face*

Also, you risk Amazon getting confused about the record, and even if CreateSpace takes the POD edition off the market, Amazon could  list the POD as Temporarily Out of Stock, at least until you turn it on in that market. This, obviously, does not benefit individual consumer hardcover sales. But if your hardcover is very expensive (for the library market) that may not really matter.

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